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Skyrocketing land price worries builders, buyers

Builders are at their wits' end when it comes to pricing their `products'

In T.Nagar, Mylapore, Santhome and Kilpauk, the rate is over Rs. 4,500 a sq. ft.Scarcity of cement, blue metal and sand

CHENNAI: The skyrocketing price of land is causing concern to builders, real estate developers and consumers in the metropolis.

Apartments in many residential localities are selling at over Rs. 3,500 a sqft and in T. Nagar, Mylapore, Santhome and Kilpauk, the price is over Rs. 4,500 a sqft, say construction industry representatives.

The escalating cost of land, labour and overheads contribute to high selling rates, say builders.Builders Association of India Chennai region chairman L. Moorthy says construction cost has gone over Rs. 1,000 a sqft due to the rise in the price and scarcity of cement, blue metal and sand.

Minimum cost

Another builder, R. Kumar, says a ground (2,400 sq. ft.) costs Rs.1 crore in almost all residential areas. "You can build 3,600 sqft on a ground according to rules. So the minimum cost per sq. ft. of built-up space comes to over Rs. 2,800. Add to this Rs. 1,000 as construction cost, besides overheads and profit margins; it is a whopping Rs. 4,000 a sqft."

Builders are at their wits' end when it comes to pricing their `products' as they feel that the size of the market will shrink because of the extraordinary rates.

This trend is seen even outside Corporation limits. Land prices on Old Mahabalipuram Road seems to be the barometer for real estate prices in Chennai, say builders and land developers.